After nearly two years of negotiating, Minnesota lawmakers are still far from any deal on how to fund Minnesota’s transportation needs.

Gov. Mark Dayton (Associated Press: Jim Mone)

With lawmakers stymied, Gov. Mark Dayton tried to break the gridlock on Monday by presenting two different proposals “for a compromise agreement.”

Each one accepted Republican proposals to use a significant amount of existing money for roads and bridges and raised new revenue by increasing license tab fees. One proposal also included a gas tax increase, while the other relied on a big increase in tab fees.

“We have the House position all their way, the Senate position all their way for the last nine weeks… I didn’t see any movement,” Dayton said. “This is an attempt to bring us to the middle.”

But the only bipartisan agreement Dayton’s proposal inspired was rejection. Both House Republicans and Senate Democrats said they were uncomfortable with the big increases in license tab fees Dayton proposed.

But time is running out to find an offer lawmakers can buy. There’s less than a week before the constitutionally mandated end of the 2016 legislative session. With Republicans controlling the House and Democrats the Senate, any deal has to reach bipartisan support.

Dayton said he’s open to other ideas that provide the $600 million per year for state highways that all parties have agreed Minnesota’s roads and bridges need.

“I’m not wedded to these numbers,” Dayton said. “I’m wedded to $600 million.”

There are a number of different proposals on the table to fund that $600 million, either alone or mixing and matching. Here’s how much money lawmakers could find from the major ideas in play:

The foundation of Democratic proposals have been to raise the state’s tax on gasoline, which is currently 28.5 cents per gallon. Minnesota’s gas tax revenue is constitutionally dedicated to funding roads and bridges.

Every one cent per gallon the gas tax is raised is projected to bring in about $30 million per year.

The original proposal from Gov. Mark Dayton and Senate Democrats would have raised the tax by at least 16 cents per gallon, or $480 million per year — adding about $2 to the cost of filling a 12-gallon tank.

A revised Senate proposal offered two weeks ago would have raised the gas tax by 12 cents: $360 million per year, or about $1.50 for the cost of filling a 12-gallon tank.

One of Dayton’s proposals on Monday included a 5-cent increase: $150 million per year and about 60 cents added to filling a 12-gallon tank.

Democrats say a gas tax is the best way to raise revenue for roads and bridges, because the money is constitutionally dedicated for roads. Republicans say the tax increase would hurt Minnesota drivers and isn’t necessary because of other available funding sources.

The fees Minnesotans pay every year for license plate tabs are also constitutionally dedicated to roads and bridges.

The current annual fee is $10 plus 1.25 percent of the car’s base value. That assessed value drops by 10 percent every year for 10 years. The minimum fee is $35.

There are several ways to raise money from tab fees: increasing the $10 base fee, increasing the percentage of a car’s value an owner owes, and changing the schedule by which a car’s taxed value declines.

In two Monday proposals, Dayton proposed raising $250 million per year and $400 million per year from higher license tab fees.

Both proposals doubled the base fee from $10 to $20 and raised the rate from 1.25 percent to around 1.65 percent.

Increasing the base fee by $10 brings in about $46 million per year.

Raising the tax rate from 1.25 percent to 1.65 percent brings in $183 million per year.

Dayton also raised another $22 million per year by increasing the minimum fee payable by $10.

Dayton’s $400 million proposal raised an extra $159 million per year by making a car’s taxable value decline more slowly. On Tuesday, the House offered a different proposal to raise $100 million per year by making a car’s taxable value decline more slowing, though it included a “grandfather clause” applying the changes only when people purchase new cars.

A $15,000 car currently pays $1,173 over 11 years in license tab fees. Dayton’s smaller proposal would raise that to $1,627, while his larger proposal would increase it to $1,904.

A $30,000 car would rise from $2,198 currently to $2,978 in the smaller plan or $3,531 in the larger one.

Minnesota House Speaker Kurt Daudt

Republicans haven’t been as opposed to raising tab fees as they have been to a gas tax, but House Speaker Kurt Daudt, R-Crown, on Monday said Dayton’s proposed increases were far too large.

Minnesota has a projected $900 million surplus for the current two-year budget cycle, and it could redirect any amount of this to transportation.

This money would not be constitutionally dedicated to roads and bridges, so future legislatures could redirect this money to other priorities unless Minnesota amends the constitution.

Any money removed from the general fund wouldn’t be available to spend on other priorities, such as tax cuts or education.

House Republicans proposed redirecting the state’s sales tax on auto parts to roads and bridges, instead of the general fund. That tax is projected to bring in between $230 million and $250 million per year.

Other transportation-related funding sources in the state’s general fund include the motor vehicle lease sales tax and the rental car tax.

The House GOP in total would spend around $300 million per year from the general fund. Dayton on Monday proposed spending $200 million per year. Previously, Democrats resisted including large amounts of general fund money in their plans.

DFL critics don’t like removing money from the general fund and don’t like it not being constitutionally dedicated.

An added component to the mix is borrowing money to pay for road projects.

Minnesota can take out two types of bonds: one is limited to being spent on the state’s trunk highway system, while the other — “general obligation” bonds — can be used for local roads. Trunk highway bonds can be authorized for multiple years at once, while general obligation bonds have to be reauthorized each year.

All the major proposals, Democratic and Republican alike, include borrowed money. Republicans want $250 million per year, or $2.5 billion over 10 years, split between trunk highway and general obligation bonds. Dayton’s proposal includes $200 million per year in bonding, or $2 billion over 10 years, all in trunk highway bonds.

UPDATE: This article has been revised to add additional details about license tab fee revenue.

David covered politics and government for the Pioneer Press from 2014 to 2017.

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Perfect strategy for the man who has a driver and a state-provided car.

Stranger in the Alps

I’d rather pay a little more at the pump than a lot more on my tabs.

BorderLine Guy

How often do you fill up?

Carol Loshek

I would too.

EastSider

I’d rather not pay either, and instead require the black hole that is Minnesota budgeting to find the money elsewhere.

Rob Bauman

Remember all of this at election time. We have an over one billion surplus and this bugs bunny can’t get it done without taking more of our hard earned dollars. He does not have any idea or concept of having to make money for your family. This guy is not a Democrat or anything else! Heb ba da heb, that’s all folks!

Sean Koppie

exactly builds billion dollar stadiums refuses to pay us back with the surplus as the republicans suggested but democrats are for the poor right? where did that surplus disappear to?

Wanye Kest

Instead of a sales tax increase, why don’t we raise fares on the buses and ‘blight’ rail? And while we’re at it, let’s charge for registering bicycles! Share the wealth, governor.

Randy MacDonald

spread the burden

Sean Koppie

exactly they use roads to so it’s only fair. to almost double someones car fees but do nothing to tax the buses and light rail? either way the whole plan is terrible he needs to go. 97% increase on tabs but you built billion dollar stadiums and have a surplus? wtf! The roads have been in terrible condition for the last 5 years so whats the excuse for that?

I am always shocked to read about how out how much politics is going on in government. According to the table below, MN is just below average for state gas tax. I am OK with being below average in that type of category. Assuming I have accurate facts, a 5 cent increase would be about 18% for those of you keeping score at home. Didn’t they increase it in 2008 by 8.5 cents? Now folks, this is per gallon of gas and it doesn’t change with the cost of fuel at the pump. Can we conclude that disbursements in this area of State Government continue to outpace revenue?

We’re already in the top 5 in the country for being taxed, do we really need more abuse?

Gary Doan

Maybe they should actually spend transportation money on roads.

Buddha22

Unfortunately, we got scammed by the 2006 Transportation Amendment, which requires the state to spend over half of the transportation funds on public transportation, instead of the road and bridge improvements for which we all thought we were voting.

So this option is what the governor said he was going to work so hard on over the weekend? Tax, tax, tax. Looks like he put in less than an hour’s worth of work this past weekend.
You’ve already taken $1 billion more than you should have, Mr. Dayton. Since you and the DFL aren’t giving that money back, use the surplus. Stop vote pandering by offering over $120 million to North Minneapolis that won’t do anything for race disparities. Or back off the high buck babysitting you call “early education”. If roads and bridges are so bad, prioritize, Mr. Dayton and use the money where its needed and stop the pandering.
There is no reason to tax us more!

Ted

So the budget’s gone up, what, 10 billion in the past few years? And Odumma threw out a trillion to “fix our infrastructure”. All counties have assessed a “wheelage” tax, The state has over-taxed us 2 billion?? But we need to suck even more from the middle-class, since our roads never seem to get any better. Great, expensive, cute train lines that cost billions and benefit few going up all over. Lots of bike trails. The money never seems to find it’s way to the roads. Strange. So, after creating yet another new tax bracket to “soak the rich” ( except of course those who put their trust fund in South Dakota banks ) and subsequently piling up a surplus, they need even more tax revenue. What a broken government run my morons. I’ll bet all those “conservative #nevertrump Republicans will stop this! Good luck.

Sean Koppie

finally someone else says it. the road in mn have been rim bending trash for years yet we pay and pay.

http://GreenHeretic.com/ GreenHeretic

Do I remember correctly that some of the tab fees go to transit?

ru56by .

We all want stuff, but we don’t want to pay for it.

Thomas Kotula

We’ve paid for it already, they piss away the money and then tell us they need more.

EdDav

Start by not building large, cement or wooden walls along highways. Once all the bridges and roads are repaired, then you can start spending on these huge walls like the one just installed along 35E in Eagan. Next, take the $900 million surplus and put it all into roads since you are not giving it back to the people who were overtaxed. After that, cancel the light rail from Minneapolis to Eden Prairie. Cancel all rail projects that are not self sustaining (ie the fairs pay for the annual cost) which means cancel all of them. If you still don’t have enough money, find places in the budget that are luxuries and can be cut. Stop ALL non-essential travel, not just to states the Governor disagrees with. Stop vacations disguised as official duties aka The Governor’s Fishing Opener. With the recent growth in the state budget, I’m sure there is plenty of money that could be redirected towards roads and bridges.

Sean Koppie

wow i thought metro transit had to pay for all that bs. So even if you never get on a light rail or bus you pay for it lmao gotta love mn. meanwhile we drive on pot hole infested roads for the last 5 to 7 years.

barney911

But we already pay big taxes for roads and tabs? Where did it go?

Teteka Gautsch

Try enforcing the light rail fees for once, increase light rail and bus fares, stop spending millions on bike lanes and narrowing high traffic streets. Thanks again for increasing the tax payers cost in all of this, of course we should have to pay for mismanagement of the budget, why not? Big business and wealth get the tax breaks while we pay more across the board.

Tater4579

You can tell he’s not running for reelection. If he was he would just tax the smokers.

mike madison

that’s the best tina could whisper in governor goofy’s ear.
remember that next election.

Buddha22

If you want to increase revenue from the gas tax, increase the amount of gas purchased. This can be accomplished by supporting oil production and increased refining capacity, which would increase supply. If gas is cheaper, people will buy more gas, and the state gets the same amount of tax revenue for each gallon purchased. Increasing the cost per gallon of gas will decrease the amount of gas purchased, which could decrease the amount of tax revenue. For instance, a 5% increase in the gas tax could lead to a 5% decrease in gas purchases, resulting in no gain in state tax revenues, but consumers who get less bang for the buck. This is basic economics. Demand is not static, but it reacts to price. Also, get rid of the ethanol subsidies. This will save the state money, return corn production toward food (lowering the cost of food), and do less damage to all our car engines.

Buddha22

I am in favor of revenues not being tied to any specific spending. We elect people to the legislature to represent us. Spending choices should be made on a biannual basis. This protects the state from committing money in the future that we might not have. If we don’t like the choices our legislators make, we can vote them out. Same goes for the governor.

Droberts

Minnesota needs to follow Colorado and legalize personal use of marijuana, taxing it of course. In another couple years Colorado will be able to pave their highways in gold with the surplus. Get real Minnesota! And where are the fee/tax increases for the commercial vehicles or did I miss that in this article?

Sean Koppie

this is such bs so know 1200$ for 600$ tabs??? thats outrages! dayton needs to go. He found BILLIONS for stadiums but can’t fix our roads that have been in shambles for years now. Also its not OR he wants gas AND tabs (just lower if the gas is included in the bill). Don’t give us the bs on “if you can afford it” who buys 600$ tabs in preparation for them to almost go out to 1200$. also where did the dam surplus go???

Buddha22

The point is we are dedicating corn production (and overall agricultural production) toward ethanol (a fuel with low demand and poorer efficiency), instead of toward feed corn or corn for food production. Lower production for feed and food, increases the cost of feed, which also increases the cost of meat, milk, other dairy, etc. In addition, the cost of food containing corn products also increases.

Sean Koppie

idk how hes still there. building stadiums while we drive on these crap roads. also a disappearing surplus lol.

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